AK STEEL REPORTS 2ND QUARTER RESULTS

 

Middletown, OH, July 18, 2003—AK Steel (NYSE: AKS) today reported a net loss of $78.2 million, or $0.72 per diluted share of common stock, for the second quarter of 2003.  Net sales were $1,021.4 million on shipments of 1,399,000 tons.  The company said the  results reflect the combined impacts of lower flat-rolled selling prices, higher raw material, energy and maintenance costs and several one-time charges.  Shipments were about 7% lower than in the second quarter of 2002, partially the result of the company’s decision to reduce shipments to certain spot markets where prices continue to be depressed.  The company said its average flat-rolled selling price decreased nearly 4%, to $682 per ton, from the second quarter of 2002.

A planned maintenance outage was performed on the company’s Middletown blast furnace during the second quarter at a cost of $11.4 million.  In addition, the  company experienced continuing high costs for purchased slabs, carbon and stainless scrap, nickel and natural gas.  During the quarter, the company shut down a sinter ore  recycling plant in Middletown, resulting in a write-off of $4.1 million.  AK Steel said it had modified its requirements in order to utilize a more cost-effective fluxed iron ore pellet at the Middletown blast furnace, eliminating the need for the sinter ore recycling plant.  At the company’s Ashland, Kentucky plant, work was performed in preparation to resume coke making on a battery placed on hot idle status in 2001.  While the additional capacity will result in lower annual coke costs of approximately $3 million, the company expended $2.4 million in the second quarter in preparation for the restart planned for later this month.

“Market conditions, high input costs and legacy burdens continue to make bottom-line improvements elusive,” said Richard M. Wardrop, Jr., chairman and CEO of AK Steel.  “We are, nonetheless, committed to leaving no stones unturned to find opportunities for cost reductions and efficiencies.”

AK Steel, headquartered in Middletown, produces flat-rolled carbon, stainless and electrical steel products for automotive, appliance, construction and manufacturing markets, as well as tubular steel products.  AK Steel has steel producing and finishing facilities in Middletown, Coshocton, Mansfield, Walbridge, and Zanesville, Ohio; Ashland, Kentucky; Rockport, Indiana; and Butler, Pennsylvania.  AK Steel also produces snow and ice control products, and operates a major industrial park on the Houston, Texas ship channel.

 

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